Sharekhan Suggests 2 Stocks To Buy & Hold For Upto 25% Return, Strong Retail Growth

Indian stock markets have revived today significantly. Nifty stood at 16,012.90, surging by 1.12% today, till around 12 pm. Here, 2 stocks have been mentioned as suggested by Sharekhan to buy and hold.

Stock Recommendations By Sharekhan and Company Performances

Sharekhan, a renowned brokerage firm suggested two stocks, Medplus to buy and Mastek Ltd. to hold.

Medplus' total sales in FY22 were recorded at Rs. 3779.3 crore, which is expected to be at Rs. 4894.1 crore in FY23. Their Operating Profits in FY22 stood at Rs. 303.7 crore, which is expected to be at Rs. 392.4 crore in FY23. The company's Reported PAT in FY22 was recorded at Rs. 94.7 crore, which is expected to be at Rs. 97.7 crore in FY23.

Mastek's revenues in FY22 were recorded at Rs. 2,183.8 crore, which is expected to be at Rs. 2,581 crore in FY23. Their OPM in FY22 stood at 21.2%, which is expected to be at 20.2% in FY23. The company's Adjusted PAT in FY22 was recorded at Rs. 295.1 crore, which is expected to be at Rs. 342.3 crore in FY23.

Return comparison of stocks and past performances on NSE

In this table the Current Market Price (CMP) and the Target Price (TP) of the recommended stocks have been mentioned.

Company	CMP	Target Price	1 Year Potential Return
Medplus	Rs. 756	Rs. 945	25.00%
Mastek Ltd.	Rs. 2089	Rs. 2400	14.88%

The current market price of Medplus is Rs. 756, and the brokerage firm has estimated a target price of Rs. 945, with a potential upside of 25% in 1 year, and recommended to buy. In the past 1 year, its stock price has fallen by 32%, and in the past 6 months, the stock price has fallen by 26%. In the past 1 month, the share price has fallen by 9.94%.

The current market price of Mastek Ltd. is Rs. 2089, and the brokerage firm has estimated a target price at Rs. 2400, with a potential upside of 14% in 1 year, and recommended to hold. In the past 1 year, its stock price has fallen by 8.09%, in the past 6 months, the stock price has fallen by 30.06%, while in the past 1 month the share price has fallen by 18.69%.

Comments By Sharekhan

About the stocks of Medplus, the brokerage firm said, "Over the past 3 months, the stock price has corrected by ~26% and this provides a good opportunity for investors. Medplus is likely to benefit from the shift towards the organised retail pharmacy, with the organised sector set to stage a much higher growth. The company plans to double store count in 3 years with 1000 new stores to be set up in FY23E, established capabilities, efforts to increase the share of private label business, maturing store aeging and an eye on tapping the adjacent health care space leveraging the strong network."

Commenting on Mastek, "We have revised downwards our earnings estimates for FY2023-FY2025E by 4-11%, given increasing external factors, adjustment to our USD revenue by factoring in adverse cross-currency headwinds, and increasing macro concerns. At the CMP, the stock trades at a valuation of 19x/17x its FY2023E/FY2024E EPS, trading in-line with its two-year average valuation. Hence, we have lowered our target multiple in-line with our reduction in target multiples of leading mid-cap companies because of near-term growth headwinds, expected moderation in order bookings in the UK public sector, margin pressure, and reduction in discretionary spends by the public sector due to inflationary environment."

Disclaimer

The above stocks were picked from the brokerage report of Sharekhan. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.